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HomeMy WebLinkAboutR-2014-049 Settlement of Lawsuit with Western Peterbilt, Inc. RESOLUTION NO. R- 2014 -049 A RESOLUTION authorizing and directing the City Manager of the City of Yakima to execute a Settlement and Release Agreement entered into by the City of Yakima and Western Peterbilt to resolve and settle the lawsuit brought by the City of Yakima against Western Peterbilt, Inc. WHEREAS, on October 29, 2012, a lawsuit was filed by the City of Yakima in Yakima County Superior Court No. 12 -2- 03732 -8 entitled City of Yakima v. Western Peterbilt, Inc.; and WHEREAS, the lawsuit arises out of a fire on April 28, 2011 that destroyed a refuse truck that the City purchased from Western Peterbilt, Inc. in June 2009; and WHEREAS, the City's property insurer Affiliated FM Insurance Company ( "Affiliated FM ") paid the City $130,011 following the fire, and the City had a $100,000 insurance deductible; and WHEREAS, the lawsuit was an effort for the City to recover its $100,000 deductible and for Affiliated FM to recover the amount it had paid the City, and all attorney fees for the lawsuit were paid by Affiliated FM and not by the City; and WHEREAS, on December 17, 2013, the Court granted the City's Motion for Summary Judgment on Liability; and WHEREAS, the City has engaged in discussions with Western Peterbilt, Inc. for the resolution of the lawsuit through negotiation and settlement and the parties have worked together to mutually resolve the issues; and WHEREAS, through negotiation, the settlement will resolve all claims in the matter, subject to the approval of the Yakima City Council, and the settlement proceeds of $245,000 will be allocated between the City, which will receive $98,477.02, and its insurer Affiliated FM, which will receive $142,981.17; and WHEREAS, the City Council of the City of Yakima deems it to be in the interest of the City to authorize the City Manager to execute the attached Settlement and Release Agreement to resolve and conclude the lawsuit; now, therefore, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF YAKIMA: The City Manager of the City of Yakima is authorized to sign the attached Settlement Agreement entered into by the City of Yakima and Western Peterbilt, Inc to resolve and settle the lawsuit brought by the City against Western Peterbilt, Inc., which involves a settlement payment by Western Peterbilt of $245,000, part of which will be allocated to the City of Yakima and part to Affiliated FM. ADOPTED BY THE CITY COUNCIL this 1 day of April, 2014. 0 I ATTEST: �P .. ._ � . icah Cawley, yor • City Clerk ' � b, � ` PgZ� SETTLEMENT AND RELEASE AGREEMENT This Settlement and Release Agreement (hereafter the "Agreement ") is made and entered into by and between the City of Yakima, a Washington municipal corporation (hereafter "Yakima "); Western Peterbilt, Inc., a Washington corporation (hereafter "Western Peterbilt "); and Affiliated FM Insurance Company, a Rhode Island corporation (hereafter "Affiliated FM "). 1. Yakima, for and in consideration of the promise to pay Two Hundred Forty Five Thousand Dollars ($245,000.00) in cash or equivalent funds to the Carney Badley Spellman trust account within 15 days of mutual execution of this Agreement, the sufficiency of said sum being hereby acknowledged, hereby releases, and forever discharges Western Peterbilt, its affiliated entities and/or subsidiaries, Zurich North America, and its member companies, including but not limited to Zurich Direct Markets, Zurich American Insurance Company, along with any and all attorneys, adjusters, agents, officers, employees, successors and/or assigns of any of the above - listed business or legal entities (collectively herein the "Released Parties "), of and from any and all claims, demands, damages, actions, causes of action, or suits of any kind or nature whatsoever, arising out of the Incident involving a 2009 Refuse Truck purchased from Western Peterbilt in 2009 and alleged to have occurred on or about April 28, 2011 (the "Incident "), and which is the subject of the litigation outlined below. Yakima understands and agrees that this Agreement includes any unknown injury /damages related to the Incident and/or any condition or injury hereafter to be discovered. 2. This Agreement forever discharges the Released Parties from any cause of action or obligation, known or unknown, and whether the same may hereafter arise, develop, be discovered, including, without limiting the generality of the foregoing, any and all claims and demands which Yakima has asserted or could have asserted against the Released Parties in litigation commenced by Yakima in the Superior Court of the State of Washington in and for the County of Yakima under cause number 12- 2- 03732 -8, which action Yakima agrees to dismiss, with prejudice, and without award of costs or attorneys' fees to any party. 3. Also in consideration of the above - referenced payment, Yakima does hereby assign to the Released Parties all of its rights, title, and interest in any causes of action, claim or demand of any nature arising out of the Incident involving a 2009 Refuse Truck purchased from Western Peterbilt in 2009 and alleged to have occurred on or about April 28, 2011, and which is the subject of the litigation commenced by Yakima in the Superior Court of the State of Washington in and for the County of Yakima under cause number 12 -2- 03732 -8. 4. Also in consideration of Yakima's above - referenced agreement to release and discharge the Released Partie, the Released Parties hereby release and forever discharge Yakima from any and all claim, counterclaims, demands, damages, actions, causes of action, or suits, of any kind and nature whatsoever, arising out of the Incident involving a 2009 Refuse Truck purchased from Peterbilt in 2009 and alleged to have occurred on or about April 28, 2011, and which is the subject of the litigation commenced by Yakima in the Superior Court of the RELEASE AND SETTLEMENT AGREEMENT Page l of 5 FAC003 0024 pc04ec46hz.004 State of Washington in and for the County of Yakima under cause number 12 -2- 03732 -8. The Released Parties understand and agree that this Agreement includes any unknown injury /damages related to the Incident and /or any condition or injury hereafter to be discovered, and /or any cause of action or obligation, known or unknown, and whether the same may hereafter arise, develop, be discovered, including, without limiting the generality of the foregoing, any and all claims and demands which the Released Parties may assert in any action related to the Incident. 5. Also in consideration of Yakima's above - referenced agreement to release and discharge the Released Parties, the Released Parties hereby agree to protect, defend, indemnify and hold harmless Yakima, its elected and appointed officials, employees and agents from any and all claims, demands, losses, liens, liabilities, penalties, fines, lawsuits, and other proceedings and all judgments, awards, costs and expenses (including attorneys' fees and disbursements) resulting from or concerning the Incident involving a 2009 Refuse Truck purchased from Peterbilt in 2009 and alleged t have occurred on or about April 28, 2011, and which is the subject of the litigation commenced by Yakima in the Superior Court of the State of Washington in and for the County of Yakima under cause number 12 -2- 03732 -8. 6. Also in consideration of the above - referenced payment, Yakima agrees, prior to disbursement of settlement funds, to satisfy all subrogated interests, debts and liens for insurance payments and any and all outstanding liens by, or debts owed to, any source whatsoever, including but not limited to any liens by insurance companies, financial institutions, auto dealerships, auto repair shops, or otherwise. In the event that a lienholder seeks repayment from any of the Released Parties, Yakima agrees to defend, indemnify and hold the Released Parties harmless from any and all such liens —and the related losses and liability —and to pay the reasonable attorney fees incurred by the Released Parties in defending against any such claims and /or legal or other actions relating thereto. 7. Specifically, Yakima will agree not to sell or otherwise dispose of the Refuse Truck hulk for a reasonable period of time. Western Peterbilt's insurer is requested to conduct any investigation promptly so til e truck may be disposed of In any event, after November 30, 2014, Yakima is free to dispose of the truck as it sees fit. Yakima will receive the benefit of any sale for salvage or otherwise. Yakima shall store the truck in the same manner it has been stored since the date of loss but otherwise assumes no responsibility for its safekeeping. 8. Should any person or entity not a party hereto challenge the validity of this Agreement, or any term thereof; pursue recovery of monies from the Released Parties, Yakima shall provide to the Released Parties such cooperation and assistance as the Released Parties may reasonably request in order to resist such a challenge or defend such a claim. If Yakima needs to retain counsel for the process referred to in this paragraph, Western Peterbilt will pay for Yakima's reasonable attorney fees. 9. Yakima agrees and understands that this Agreement, and the giving of consideration therefore, does not constitute an admission of liability by any one or more of the Released Parties —which liability is expressly denied —and is given in full settlement and RELEASE AND SETTLEMENT AGREEMENT Page 2 of 5 FAC003 0024 pc04ec46hz.004 compromise of disputed claims, present and future, known and unknown, and also is intended to release all claims for any and all future injury and damage, including effects or consequences thereof not now known but which may later develop or be discovered, and all causes of action therefore. Yakima also agrees to cooperate to enforce and implement this Agreement and its intent. If Yakima needs to retain counsel for the process referred to in this paragraph, Western Peterbilt will pay for Yakima's reasonable attorney fees. 10. The parties to this Agreement (the "Parties ") hereby declare that they have fully read and understood the terms of this Agreement and that they voluntarily accept these terms for the purpose of making a full and final compromise and settlement of any and all claims — past, present and future, disputed or otherwise, both known and unknown —on account of the Incident. The Parties also declare that they had the opportunity to review this Agreement with legal counsel, and have availed themselves of such opportunity. In any case, the Parties represent that they have fully read and understood all the terms of this Agreement and that they enter into the Agreement knowingly and willingly, with complete understanding of its import and effect. The Parties r epresent that they are of sound mind and are fully capable of entering this Agreement as their own willful and volitional act. The Parties further understand that the express purpose of this Agreement is to forever bar any further or additional claims of any kind whatsoever arising out of or in any way connected with, or related to the Incident, and claimed injury and /or damages related thereto. 11. This Agreement extends to, releases, binds and inures to the benefit of the Parties and all their heirs, executors, administrators, personal representatives, underwriters, beneficiaries, attorneys, agents, and assigns. 12. This Agreement is entered into in the State of Washington and shall be construed in accordance with Washington law. The venue of any action necessary under this Agreement shall lie in the Superior Court of the State of Washington for Yakima County. 13. The parties to this Agreement agree that if they encounter disagreements about the contents or enforceability of this Agreement, said disagreements shall be resolved by a mutually agreeable arbitrator who shall serve as the final arbiter of any such disagreements and disputes. The arbitrator's ruling shall be final, binding, and non - appealable. Each party shall pay its own costs and attorney fees if any other party invokes this arbitration clause to resolve any such disagreements! Each party shall also pay one -half of any fees charged by the arbitrator for resolving any such( disagreement. 14. This Agreement includes the entire agreement between the parties and may not be changed except in writing by all the Parties. 15. This Agreement may be executed in counterparts. Each counterpart shall be deemed an original, all of which taken together shall be one and the same instrument. This Agreement shall become effective upon execution of a counterpart by each party and delivery to the other party. RELEASE AND SETTLEMENT AGREEMENT Page 3 of 5 FAC003 0024 pc04ec46hz.004 CITY OF YAKIMA WESTERN PETERBILT, INC. Ilk tl , anager I i l . ourke City . "k. - g i LJ ► l a ,ro. (.4 tl eill.e , . C ( - Pme and title Date: 4 [gt y rint name I Date: '. / t1. � 20 ( y AFFILIATED FM INSURANCE COMPANY Attest: WA/Ae/14,(4,- Ilk I , Print name and title A S o7/ %S wA A - 1 % / f ,l U Sonya C' ay Tee, City Clerk. ' No y %%, Date: / //Pr . G" e 1 6 • Q i CITYCONTRACTNO: - - 7a .? �* ✓ RESOLUTION NO: =: - r "` �, C " - STATE OF WASHINGTON) ‘‘`"`"-- ) ss. COUNTY OF YAKIMA ) On this day personally appeared before me, Tony O'Rourke, to me known to be the City Manager of the City of Yakima, a Washingtomunicipal corporation, and.he executed the within and foregoing instrument ent and acknowledged said instrument to be the free and , voluntary act and deed of the City of Yakima, for the uses and purposes therein mentioned. I GIVEN under my hand. nd official seal this day of aloi l f 2014. �.., ^ ... 9 Printed Name: Tam') vn y A. 12._e, /114 b , TAMMYA REGIMBAL l Notary Public in and for °tl�e State of Washington, Notary Public residing at t^ V1'14 w Il . 1 State of Washington 1 My Commission Expires .My commission expires: ' 20 Juy 9, 2017 . , RELEASE AND. SETTLEMENT' A Page-4 of 5 PAC003 0024 pc04cc46hz.004 STATE OF tkVvr ) ) ss. COUNTY OF A<Iir On this day personally appeared before-me !oil ( 1+&,(1.166 , to the knOwri to be-the ();,FD Of Western Peterbilt, Inc., a Washington corpoittiOn, and he/she executed the within and foregoing instrument and adknoWledged Said instrument to be the free and voluntary act and deed of Western Peteibilt, Inc:, for the uses and purposes therein mentioned. OIVFN under inyhand and offiCial seal this 11 day, of HOre,h 2014. , * .. i ts q......!'ooN 41110 44 - 4 .. "rin ect Name 0 - h • ■/: , dr.xi AR y co - ---- a r Notary Public in and for the Stat:' of. WaShirigtOn : (.) • • ? • • • P B •••\C) residing at Ke.6A,, u6f1, i o My comthiSsion expires: .. . ..... . ok I OP wNs' STATE OF RHODE ISLAND ) ss. COIJNT\POF PrOVI Oen, e On this day appeared before me, g6 1 De rt 6aune4 to me known to be the \ itic N t .r , Of Affiliated FM InSurarite Company, a Rhode Island Corporation, and he/she executed the within and foregoing instrument and acknowledged said instrument to be the free and voluntary act and deed of Affiliated."FM Insurance Company, for the uses and purposes therein mentioned. f L t 4 " GIVEN under my hand and OffiCi.61 seal this CI day Of faCI 2014. 1td . . Printed Name: 47j7. Notary Public in d for *State bf Rhode Island, residing at my' commission expires: RELEASE' AND:SETTLEM ENT AGREEMENT Page 5 of 5 FAC'0610024 pc04ec4611z.004 (, , ,ti., ) " - - %.,-,\ BUSINESS OF THE CITY COUNCIL YAKIMA, WASHINGTON AGENDA STATEMENT Item No. For Meeting of: 4/1/2014 ITEM TITLE: Resolution authorizing a Settlement and Release Agreement entered into by the City of Yakima and Western Peterbilt, Inc. to resolve and settle the lawsuit brought by the City of Yakima against Western Peterbilt, Inc. • SUBMITTED BY: Helen A. Harvey, Senior Assistant City Attorney SUMMARY EXPLANATION: This matter is on for consideration of a Resolution authorizing and directing the City Manager of the City of Yakima to execute a Settlement and Release Agreement entered into by the City of Yakima, Affiliated FM Insurance Company, and Western Peterbilt, Inc. to resolve and settle the lawsuit brought by the City against Western Peterbilt. The lawsuit was filed in Yakima County Superior Court No. 12 -2- 03732 -8 entitled City of Yakima v. Western Peterbilt, Inc. The lawsuit arises out of a fire on April 28, 2011 that destroyed a refuse truck that the City purchased from Western Peterbilt in June 2009. The City's property insurer, Affiliated FM, paid the City $130,011 following the fire. However, the City had a $100,000 insurance deductible. The lawsuit was an effort for the City to recover its $100,000 deductible and for Affiliated FM to recover the amount it had paid the City. On December 17, 2013, the Court granted the City of Yakima's Motion for Summary Judgment on Liability. In the allocation of the settlement proceeds between the City and its insurer, 57% ($2,018.83) of the costs of $3,541.81 are allocated to Affiliated FM and 43% ($1,522.98) to the City. Subject to City Council approval, the parties have resolved the lawsuit through a payment from Western Peterbilt of $245,000. Of that settlement amount, the City will receive $98,477.02, which represents the City's recovery of its $100,000 deductible minus its allocation of case costs, and the City's insurer Affiliated FM will receive $142,981.17. All of the attorney fees to file and litigate the claim were paid entirely by the City's insurer, Affiliated FM, and not by the City. Resolution: X Ordinance: Other (Specify): Contract: Contract Term: Start Date: End Date: Item Budgeted: NA Amount: Funding Source /Fiscal Impact: Strategic Priority: Public Trust and Accountability Insurance Required? No Mail to: Phone: APPROVED FOR SUBMITTAL: _. City Manager RECOMMENDATION: Adopt resolution. ATTACHMENTS: Description Upload Date Type 0 resolution 3/27/2014 Cover Memo 0 Settlement and Release Agreement 3/20/2014 Backup Material